Saturday, May 18, 2024

Saudi Arabia Asks Pakistan to make China Sinopec part of $10 Billion Green Refinary Project

The Kingdom of Saudi Arabia (KSA) has encouraged Pakistani authorities to collaborate with China’s Sinopec and integrate it as a partner in a significant $10 billion green refinery project set to be established in Pakistan. This initiative aligns with Pakistan’s newly introduced green refinery policy, which provides attractive incentives, including a 7.5% deemed duty for 25 years and a 20-year tax holiday, in accordance with Saudi Arabia’s preferences.

Furthermore, Saudi Arabia has expressed a keen interest in awarding the engineering, procurement, and construction (EPC) contract to China Sinopec. Ongoing discussions involve the Pakistan State Oil, nominated by the Government of Pakistan, in partnership with the Bank of China and China Sinopec.

Sinopec’s history of providing services to Saudi Arabia in various projects, from rig services to geophysical exploration and pipeline construction, underscores their credibility. The Special Investment Facilitation Council (SIFC) has directed the Petroleum Division to assess Sinopec’s potential investment in the green refinery alongside Saudi Aramco, with a focus on expediting necessary approvals if Sinopec expresses interest.

Furthermore, the SIFC has encouraged the Petroleum Division to identify other reputable entities interested in investing in the refinery. Once established in Hub, Balochistan, this mega refinery will produce significant quantities of diesel and gasoline meeting specific quality standards, with Saudi Arabia and Pakistan sharing the equity and loans for the project, solidifying their collaborative commitment to this green and sustainable initiative.

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